Contact Us

Supreme Court Rules Bankruptcy Court Cannot Go After Certain Funds

Supreme Court Hears Arguments On Case Involving Donor Limits To Political Campaigns
Photo by Drew Angerer/Getty Images

WASHINGTON (AP) — The Supreme Court says a bankruptcy court may not go after property or funds that are legally exempt from creditors.

The justices in a unanimous opinion ruled Tuesday in favor of a California man who declared Chapter 7 bankruptcy. The man claimed $75,000 of the value of his home was covered by California’s homestead exemption and was therefore exempt from the bankruptcy estate.

The man was later found to have fraudulently shielded some of his assets from creditors. A federal bankruptcy court said the exempt funds could be used to defray the attorney fees associated with uncovering the fraud, and a federal appeals court agreed.

But the Supreme Court reversed. It ruled that a bankruptcy court may not tap into exempt money to punish debtor misconduct.


Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

More From Voice Of Amarillo

Best of the Web

Leave a Comment

It appears that you already have an account created within our VIP network of sites on . To keep your points and personal information safe, we need to verify that it's really you. To activate your account, please confirm your password. When you have confirmed your password, you will be able to log in through Facebook on both sites.

Forgot your password?

*Please note that your points, prizes and activities will not be shared between programs within our VIP network.

It appears that you already have an account on this site associated with . To connect your existing account with your Facebook account, just click on the account activation button below. You will maintain your existing profile and VIP program points. After you do this, you will be able to always log in to http://voiceofamarillo.com using your Facebook account.

*Please note that your points, prizes and activities will not be shared between programs within our VIP network.

Please fill out the information below to help us provide you a better experience.

Register on News Talk 940 AM quickly by logging in with your Facebook account. It's just as secure, and no password to remember!

Not a Member? Sign Up Here

Register on News Talk 940 AM quickly by logging in with your Facebook account. It's just as secure, and no password to remember!